TNAG-2307-FCO40-3343-UK-inward-investment-in-Hong-Kong-1991 — Page 25

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Mr Drake

Copies to:

R Paul Esq, Hong Kong Dept, FCO P Heap Esq, BTC, Hong Kong

UOB IN HONG KONG

1. I called on the Managing Director, Raymond Theodoulou of United IBV Limited in Hong Kong on 22 July to discuss their operations and Banking and commercial links between Singapore and Hong Kong. UOB have a 50% interest in IBV, the Hong Kong portion being mainly held by IBVS Executive Chairman, Robert Wang (with whom I lunched at Ernest Wong's invitation on 16 July).

2.

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IBV is primarily designed to place Hong Kong investment money overseas. Their main vehicle presently is Suntec Investment Limited, which is developing the S$1 billion Marina Park International Exhibition and Convention Centre in Singapore. The list of Hong Kong investors involved reads, am told, like a summary of the richest people in Hong Kong. They constitute an extremely powerful and influential group. They appear to have won the Singapore contract against stiff local competition and to the chagrin of many people in Singapore. A further S$ 80 million development deal is being hatched through another subsidiary Sunet Investment. Suntec deal involved a private issue of authority for 300 Rights of Permanent Residence in Singapore, not required by the investors themselves but to be used for members of their wider familiy and clan groups.

The

3. This seems to be a major example of a wider phenomenon in Hong Kong, described as "dualism" in which Hong Kong companies seek to establish a bridge to Singapore and a local niche, clearly as a possible bolt hole for 1997 but also because of shared interests (Gold Peak and an IMC Secondary issue were also mentioned). There is a flow the other way, as we know, with Singapore Banks and companies such as Keppel Steamers and Singapore Press Holdings (UOB placement) investing in Hong Kong and with EDB personnel actively visiting from Singapore to seek .out investments (though largely at present in property). There

may be some idea in Singapore that (it was said in Hong Kong) Hong Kong banking will eventually fall into Singapore's lap but it is recognised that there is "complementarity" between the two and that Singapore perceives an interest in bolstering Hong Kong to ensure that no turmoil develops there with wider regional implications. Nevertheless, the way in which the Singapore investors are going about their approach seems in Hong Kong eyes somewhat amateurish.

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